The chairman of Irish tech company WorkHuman has taken legal action in London against the private equity giant that invested millions in the business in 2020, turning it into an Irish tech unicorn.
Barry Maloney, the chairman of and largest shareholder in the human resources software company, lodged a claim in the UK High Court last month against Intermediate Capital Group (ICG) over a capital restructuring plan that would see the private equity firm’s stake in a WorkHuman holding company redeemed.
The former Esat Digiphone chief executive initially invested in WorkHuman while at Balderton Capital in 2018 after ICG loaned him the funds to acquire the shares in WorkHuman, then trading as Globoforce.
As part of the deal, ICG was granted 7 per cent stake in Falcon Topco, a Jersey-registered holding company in which Mr Maloney indirectly holds more than 49 per cent of the shares.
Mr Maloney wants the London court to approve an arrangement for him to pay back and redeem ICG’s interest in the company after the High Court in Dublin granted WorkHuman leave to execute a capital reduction earlier this year.
ICG is yet to file a defence against the suit in London but according to Mr Maloney’s court filings, the London-based firm disputes his position, claiming that shareholder resolutions passed authorising the capital reduction required its consent.
Mr Maloney claims that ICG has “subsequently, and in reliance on the same, taken steps to frustrate the actions taken by WorkHuman and [Mr Maloney] to effect the redemption, and asserted breaches and defaults” under the terms of a shareholder agreement.
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A spokesperson for the private equity group declined to comment to Bloomberg on the current legal dispute.
WorkHuman was valued at $1.2 billion (€1.1 billion), granting it tech “unicorn” status, after ICG bought a stake in 2020 but this transaction is not the subject of the current legal wrangle.
The relationship between Mr Maloney and the private equity group has soured in recent times. In correspondence exhibited in the High Court in Dublin, legal advisers for Mr Maloney cited a “breakdown in the relationship” between the parties.
Founded in 1999 and formerly known as Globoforce, the WorkHuman group operates employee reward and incentive schemes on behalf of some of the world’s biggest companies, including Cisco, Moderna, Merck, LinkedIn and Intuit.
More than six million employees are on the WorkHuman platform across 180 countries. – Additional reporting: Bloomberg
